The Latvian Competition Authority (CP) has expressed serious concerns regarding a recent judgment of the Senate of the Supreme Court in the Builders’ Cartel case, warning that the ruling may significantly undermine cartel detection and restrict effective cooperation between law enforcement authorities.
The Senate overturned a judgment of the Administrative Regional Court relating to the CP’s 30 July 2021 decision on a prohibited agreement in the construction sector and referred the case for a new hearing. The Supreme Court did not assess the existence of the cartel on the merits, nor did it question the legality or authenticity of the evidence obtained in criminal proceedings. Instead, the ruling focused narrowly on procedural issues concerning the transfer of evidence between institutions.
According to the judgment, information obtained through operational activities in a criminal investigation and transferred from the Corruption Prevention and Combating Bureau (KNAB) to the Competition Authority is inadmissible for proving a cartel agreement. The court reasoned that cartel detection does not fall within the objectives of the Law on Operational Activities and that individuals involved could not reasonably expect such information to be used in competition proceedings.
The Competition Authority disputes this interpretation. It stresses that competition law allows investigations to be initiated on the basis of information provided by other public institutions. In this case, the transferred materials were lawfully obtained, had lost their classified status, were authorised by a Supreme Court judge, and were verified as authentic through expert examination.
The CP further criticises the absence of a proportionality assessment balancing privacy rights against the public interest in uncovering long-term and large-scale cartels. The uncovered construction cartel reportedly affected public procurement worth over EUR 600 million, causing significant harm to public finances and competition.
The Authority warns that the ruling risks discouraging institutional cooperation and weakening enforcement against covert cartels, particularly given that competition authorities lack powers to conduct operational surveillance themselves. While respecting the judgment, the CP intends to pursue all available legal avenues to safeguard effective cartel enforcement.